Subsequent PPP redevelopment cannot invalidate completed acquisition where land was used for its original public purpose.

The petitioners’ land bearing Revenue Survey No. 14 paiki, admeasuring approximately 0-38-45 hectares at Atladara, Vadodara, was acquired by the Vadodara Urban Development Authority (VUDA) under notifications dated 22 August 1991 and 15 September 1992 issued under Sections 4 and 6 of the Land Acquisition Act, 1894.

The award was declared on 28 December 1994, possession was taken on 1 August 1995, and compensation was paid to the petitioners; enhanced compensation awarded in reference proceedings was also paid after the High Court dismissed VUDA’s appeal.

The land was initially used for housing schemes for weaker sections, including “Keshavnagar” and “Madhavnagar.”

After the buildings were demolished following their collapse in 2013, VUDA undertook redevelopment under the State’s 2013 Affordable Housing/Slum Rehabilitation PPP Policy.

The petitioners alleged that VUDA had unlawfully diverted the acquired land to respondent No. 4, a private developer, for commercial and residential development and had executed a registered sale deed in 2017 under a PPP arrangement.

Respondent No. 4 contended that the project was undertaken pursuant to a public tender and PPP/turnkey agreement, involving construction of rehabilitation housing on one portion of the land and transfer of another portion as consideration for the investment made.

The petitioners sought quashing of the acquisition proceedings and restoration of possession.

1. Whether the completed acquisition proceedings could be quashed, and the acquired land restored to the petitioners, on the ground that the land was subsequently developed under a PPP arrangement involving a private developer.

2. Whether the subsequent change in the mode of development or alleged diversion of the land from the original public purpose invalidated the acquisition after the award, taking of possession, vesting, and implementation of the housing scheme.

3. Whether the principles relied upon by the petitioners from M/s. Royal Orchid Hotels Ltd. v. G. Jayaram Reddy entitled them to restoration of the acquired land in the circumstances of the case.

The Court applied Sections 4 and 6 of the Land Acquisition Act, 1894, under which the acquisition notifications had been issued, and Section 16, under which, after the award and taking of possession, the acquired land vests absolutely in the Government free from encumbrances.

The Court also considered the effect of the completed acquisition, payment of compensation, and development of the land for the public purpose for which it was acquired.

It distinguished the principles relied upon from M/s. Royal Orchid Hotels Ltd. v. G. Jayaram Reddy, holding that the decision did not assist the petitioners on the facts of the present case.

The Court further accepted that redevelopment through a PPP model, pursuant to a government policy, public tender, and contractual arrangements, did not by itself invalidate the completed acquisition where the land had already been used for the intended public purpose.

The Court found that the acquisition had reached finality: the award was made in 1994, possession was taken in 1995, the land vested under Section 16, and compensation—including enhanced compensation—had been paid.

It further held that the acquired land had in fact been used for the public purpose, since residential units for weaker sections had been constructed and allotted before the subsequent redevelopment.

The later demolition of those structures and redevelopment under the State’s PPP/slum-rehabilitation policy did not retrospectively invalidate the acquisition or create a right in the former owners to reclaim the land.

The Court also accepted the respondent’s explanation that the PPP project involved construction of rehabilitation housing for weaker sections, with transfer of another portion of land to the private developer in consideration of its investment, and therefore rejected the allegation that the land had been diverted solely for private profiteering.

Consequently, the principle in Royal Orchid Hotels was held inapplicable.

Since the land had vested after possession was taken, had been used for the acquired public purpose, and had thereafter been redeveloped for housing weaker sections under a government policy, the petitioners were not entitled to restoration of possession.

The Special Civil Application was dismissed as misconceived, with no order as to costs.